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Friday, June 18, 2010

IP Dragon asked Matthijs van Basten Batenburg legal counsel of several Chinese and Dutch SME at MvBB Ltd. in Shanghai to write a guest column. IP Dragon does not necessarily agree with the content, but wants to present a forum for all opinions that have something to do with IPR in China.

Inside a Chinese Courtroom presentation for the EU Chamber of Commerce Shanghai by Stéphanie Balme of the China EU School of Law.

By Mathijs van Basten Batenburg in Shanghai

On Thursday March 4 I attend a breakfast seminar organised by the EU Chamber of Commerce in Shanghai. At 8 in the morning I join one of the tables with legal professionals who have flocked to hear a reading that has the tantalizing title “Inside a Chinese Courtroom”. Today’s subject has indeed made many curious, including myself, and I later learn that the turnout for this meeting is indeed well above average. This curiosity might be explained due to the fact that many foreigners have extremely low hopes for a fair trial in a Chinese Courtroom. The result of a small survey over the first cups of coffee of the day is in line with my own prejudices: all the lawyers on my table regard the Chinese judiciary system as a venue to be avoided at all costs, and if unavoidable, either find a Chinese lawyer to “negotiate” with the judge handling the case, or just write the file off altogether. No small wonder we are all keen to hear an expert’s opinion on this subject.

Ms. Balme turns out to be very enthusiastic speaker and it is immediately clear she has a passion for China and its judicial system. For her research she has travelled extensively throughout the country, has interviewed judges and attended court sessions.

We learn that the Chinese government is seriously committed to improve accessibility to the legal system and to modernize the courts. In practise this is mostly taken literally: old, shabby, courts are demolished and replaced by shiny, steel and concrete palaces. The government has also instated some Western rituals such as the robe and gavel, although many Chinese judges are apparently still not sure what to use these weird objects for.

Despite these investments by the government, the quality of the rulings is still questionable. By and large, judges lack a law degree and principles such as “equality before the law” are not applied. It is also good to note that there is no “division of the powers” in China: judges are considered civil servants and are subordinate to the government. Furthermore, public opinion exerts great influence over the rulings of Chinese judges. The well-known case Danone vs. Wahaha (where the Chinese company established mirror companies of their joint-venture with Danone, later forcing the French company out of the joint-venture altogether) is given as a typical example. What doesn’t come as a surprise to most of the listening lawyers is that corruption is still very real and very common, also in China’s major cities. Most of the time litigation fees are still paid cash and judges are commonly presented with “gifts” by the litigants.

Even if the judiciary system would function as in Western countries, the law itself would pose a challenge since laws are still quite chaotic and are often internally contradictory. Nevertheless, Chinese people increasingly use the courts as a way to settle problems as is shown by the stats of civil cases being filed each year. As opposed to the West, in China a judicial ruling is the start of the settlement of a conflict, not dissimilar to that the signing of a contract is still mostly the start of negotiations in this country. From a Western perspective this also means that enforceability of Chinese rulings is extremely difficult. Even if you find a judge that is prepared to rule in your favour, this doesn’t mean you can enforce the verdict!

Unfortunately we run out of time before Ms Balme is even halfway through her presentation. Reinforced in my slightly cynic ideas about the Chinese judiciary system, but once again fascinated by this country, I leave the gathering.

Written by Mathijs van Basten Batenburg, legal counsel at MvBB Ltd. in Shanghai.

IP Dragon does not necessarily agree with the content of this guest blog, but wants to offer a forum to all opinions that have something to do with IPR in China.